---

# UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

# Washington, D.C. 20549

---

# FORM 10-QSB

# QUARTERLY REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended July 31,
2001              
        
        
              
              
              
              
              
Commission File Number 0-28759

Real Estate
Opportunities, Inc.
(Exact name of registrant as specified in its charter)

Colorado   
              
              
              
              
              
              
              
              
        84-1461919
              
        (State or other jurisdiction of    
              
              
              
              
              
             
   (I.R.S. Employer Identification No.)
              
         incorporation or organization)

3225 E.
Second Avenue, Denver, Colorado        
    80206
(Address of principal executive offices)        
           
 (Zip Code)

(303) 393-1600
(Registrant's telephone number, including area code)

Indicate
by check mark whether the registrant (1) had filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days. YesX
No

Indicate
the number of shares outstanding of each of the issuers classes of common
stock, as of the latest practicable date.

9,094,218
Class         
           Number of
shares outstanding at September 13, 2001This document is comprised of 16 pages.

---

# FORM 10-QSB

## 2ND QUARTER

# INDEX

## PART I -
FINANCIAL INFORMATION

`Page
                                                                            ----
Item 1.  Financial Statements*

Condensed, consolidated balance sheets--July 31, 2001 (Unaudited) .........    3

Condensed, consolidated statements of operations--Three and six months ended
        through July 31, 2001 and 2000 (Unaudited) ........................    4

Condensed, consolidated statements of cash flows--Six months ended
        through July 31, 2001 and 2000 (Unaudited) ........................    5

Notes to condensed, consolidated financial statements (Unaudited) .........    6

Item 2. Management's Discussion and Analysis ..............................   12



PART II -- OTHER INFORMATION


Item 1.  Legal Proceedings ................................................   15
Item 2.  Changes In Securities ............................................   15
Item 3.  Defaults Upon Senior Securities ..................................   15
Item 4.  Submission of Matters To A Vote of Security Holders ..............   15
Item 5.  Other Information ................................................   15
Item 6.  Exhibits and Reports on Form 8-K .................................   15

Signatures ...............................................................    16`

*
The accompanying financial statements are not covered by an Independent
Certified Public Accountants report.

---

PART 1 - FINANCIAL
INFORMATION

ITEM 1.
Financial Statements:

# REAL ESTATE
OPPORTUNITIES, INC.
Condensed, Consolidated Balance Sheet
July 31, 2001
Unaudited

`31-Jul
                                                                           2001
                                                                          ------

                                     Assets

                                                                                                                                                    Assets
Current assets:
      Cash ............................................................$     8,710
      Indebtedness from related party .................................      5,000
      Other receivables ...............................................     17,600
      Prepaid expenses ................................................     26,611
      Property held for resale:
           Arapahoe County land .......................................  1,927,820
           Elbert County land .........................................  1,336,502
           Riverside County land ......................................     20,000
                                                                        ----------
                                                                       $ 3,342,243
                                                                        ==========
                      Liabilities and Shareholders' Equity
Liabilities:
      Acquisition notes:
           Arapahoe County:
                Related parties .......................................$   334,641
                Other..................................................    973,026
           Elbert and Riverside Counties:
                Related parties .......................................    141,921
                Other..................................................    675,402
      Notes payable to related parties ................................    182,133
      Indebtedness to related parties .................................     98,300
      Accrued interest payable:
           Related parties ............................................      9,293
           Other.......................................................      9,989
      Accounts payable ................................................      4,937
      Income taxes payable ............................................     64,021
      Accrued liabilities .............................................     35,232
                                                                        ----------
           Total liabilities ..........................................  2,528,895

Commitment ............................................................          0

Shareholders' equity:
      Common stock, $0.001 par value, 50,000,000 shares authorized,
           9,094,218 shares issued and outstanding ....................      9,094
      Additional paid-in capital ......................................    646,146
      Stock option to purchase 150,000 shares of
           common stock outstanding ...................................     16,500
      Retained earnings ...............................................    141,608
                                                                        ----------

                Total shareholders' equity.............................$   813,348
                                                                        ----------
                                                                       $ 3,342,243
                                                                        ==========`

See
accompanying notes to financial statements.

---

# REAL ESTATE
OPPORTUNITIES, INC.
Condensed, Consolidated Statements of Cash Flows
Three and Six Months Ended July 31, 2001 and 2000
(Unaudited)

`Three Months Ended           Six Months Ended
                                                                                      July 31,                    July 31,
                                                                                 ------------------          ------------------
                                                                                  2001        2000            2001          2000
                                                                                  ----        ----            ----          ----

Operating activities:
      Sales of real estate.............................................$       768,963    $         0    $ 1,285,029    $         0
      Sales of real estate, related party ..............................             0              0         54,745              0
      Recognition of partial gain on exchange of real estate ...........       142,373              0        142,373              0
      Rental income ....................................................             0            804            965          1,021
                                                                           -----------    -----------    -----------    -----------
                Total operating income .................................       911,336            804      1,483,112          1,021

Cost of sales:
      Cost of real estate ..............................................       773,954              0      1,070,277              0
      Sales commissions paid to related party ..........................         1,470              0         13,220              0
      Closing costs ....................................................           293              0            293              0
                                                                           -----------    -----------    -----------    -----------
                Total cost of real estate ..............................       775,717              0      1,083,790              0

                Net income from real estate ............................       135,619            804        399,322          1,021

Operating expenses:
      General and administrative expenses ..............................        48,260         28,908        144,588         48,715
      General and administrative-stock based compensation ..............       102,320         16,500        102,320         20,100
      General and administrative expenses-related parties ..............         3,375          4,850          5,775         11,350
                                                                           -----------    -----------    -----------    -----------
                Total general and administrative expenses ..............       153,955         50,258        252,683         80,165

                Operating income (loss) ................................       (18,336)       (49,454)       146,639        (79,144)

Other income (expense):
      Other income .....................................................             0              0          5,900              0
      Gain on sale of assets acquired from related party ...............        35,622              0         94,228              0
      Interest (expense) ...............................................       (48,662)       (18,175)       (61,638)       (34,084)
                                                                           -----------    -----------    -----------    -----------
                Total other income (expense) ...........................       (13,040)       (18,175)        38,490        (34,084)

                Income (loss) before provi income taxes ................       (31,376)       (67,629)       185,129       (113,228)

Provision for income taxes - benefit ...................................       (13,690)             0         64,021              0
                                                                           -----------    -----------    -----------    -----------
                Net income (loss) ......................................   $   (17,686)   $   (67,629)   $   121,108    $  (113,228)
                                                                           ===========    ===========    ===========    ===========

Net income (loss) per share:
      Basic ............................................................        (0.002)        (0.011)         0.016         (0.019)
                                                                           ===========    ===========    ===========    ===========
      Number of shares used for computing net income (loss) per share ..     7,385,981      6,079,646      7,385,981      6,079,646
                                                                           ===========    ===========    ===========    ===========

      Diluted ..........................................................        (0.002)        (0.011)         0.015         (0.019)
                                                                           ===========    ===========    ===========    ===========
      Number of shares used for computing net income (loss) per share ..     7,978,147      6,079,646      7,978,147      6,079,646
                                                                           ===========    ===========    ===========    ===========`

See
accompanying notes to financial statements.

---

# REAL ESTATE
OPPORTUNITIES, INC.
Condensed, Consolidated Statements of Operations
Six Months Ended July 31, 2001 and 2000
(Unaudited)

`Six Months Ended
                                                                               July 31,
                                                                           ----------------
                                                                           2001        2000
                                                                           ----        ----

Cash flows from operating activities:
      Net cash used by operating activities .........................   $(119,774)   $ (65,292)

Cash flows from investing activities:
      Cash paid for participation interest in ATC common
           stock, acquired from related party .......................           0      (26,480)
      Cash paid for rights to future revenues from a certain
           note receivable, acquired from related party .............           0      (14,430)
      Cash paid for rights to future revenues from real estate
           development, acquired from related party .................           0      (92,154)
      Cash received on disposition of  participation interest
           acquired from related party ..............................     144,290            0
      Cash paid for property additions ..............................    (199,175)     (46,589)
      Cashpaid for short borrowing for a related party ..............           0       (6,500)
                                                                        ---------    ---------
                     Net cash received (used) by investing activities     (54,885)    (186,153)

Cash flows from financing activities:
      Short-term borrowings, related parties ........................     510,300       30,000
      Repayment of short-term borrowings, related parties ...........    (305,666)           0
      Repayment of short-term borrowings, other .....................     (60,000)           0
      Indebtedness of related party .................................     (30,537)           0
      Repayment of indebtedness, related party ......................      25,537            0
      Principal payments to shareholder note ........................           0       (6,000)
      Principal payments to related party on notes payable ..........      (8,291)     (29,490)
      Proceeds from exercised stock options .........................      47,575       23,425
      Proceeds from the sale of common stock, net of offering costs .           0      219,614
                                                                        ---------    ---------
                     Net cash provided by financing activities ......     178,918      237,549
                                                                        ---------    ---------

Net change in cash ..................................................       4,259      (13,896)
Cash at beginning of period .........................................       4,451       14,066
                                                                        ---------    ---------
                     Cash at end of period ..........................   $   8,710    $     170
                                                                        =========    =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

      Cash paid during the period for:
           Interest .................................................   $  71,159    $   1,010
                                                                        =========    =========
           Income taxes .............................................   $   4,734    $    0.00
                                                                        =========    =========

      Noncash financing activities:
           Common stock issued for property .........................   $    0.00    $       0
                                                                        =========    =========
           Common stock issued for debt .............................   $    0.00    $       0
                                                                        =========    =========`

See
accompanying notes to financial statements.

---

# REAL ESTATE
OPPORTUNITIES, INC.
NOTES TO
CONDENSED, CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

## Note 1: Basis
of presentation

| | The
financial statements presented herein have been prepared by the Company in
accordance with the accounting policies in its annual 10-KSB report dated
January 31, 2001 and should be read in conjunction with the notes thereto.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the opinion of management, all adjustments (consisting only of normal recurring
adjustments) which are necessary to provide a fair presentation of operating
results for the interim period presented have been made. The results of
operations for the periods presented are not necessarily indicative of the
results to be expected for the year.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Interim financial data presented herein are unaudited.
| | ------------------------------------------------------

## Note 2: Real
estate acquisitions, sales and exchanges

| | (a)      Elbert County, Colorado and Riverside County, California.
| | ------------------------------------------------------------------

| | During
the second quarter ended July 31, 2001, we entered into an agreement to exchange
fourteen (14) lots of its Frederick, Colorado development for property located
in Elbert County, Colorado and Riverside County, California. $1,305,555 of the
acquisition price was allocated to the Elbert County, Colorado property and
$20,000 was allocated to the Riverside County, California land for a combined
acquisition price of $1,325,555.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the transaction, the Frederick development was valued at $612,912. We recorded a
partial gain on the exchange in the amount of $85,595. The unrecognized balance
of the gain for the amount of $12,310 was recorded as an addition to the costs
basis of the property. As part of the acquisition price, we used 695,000 shares
of common stock valued at $0.40 per share for a total of $278,000, and accepted
a certificate of foreclosure in the amount of $414,644. We received promissory
notes totaling $250,000 and also accepted $35,000 of liabilities.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We
discounted the $250,000 promissory notes and sold them to an individual for
$123,570 cash and $114,883 for extinguishment of debt payable to the same
individual.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)      Arapahoe County, Colorado
| | ----------------------------------

| | On
July 6, 2001 we entered into an agreement to acquire development property
located in Arapahoe County, Colorado in exchange for its Firestone, Colorado
development. The acquisition price of the Arapahoe County development totaled
$2,084,000.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We
valued the Firestone development at $799,323 and recognized a partial gain on
the transaction in the amount of $56,778. The unrecognized balance of the gain
for the amount of $158,900 was recorded as an addition to the costs basis of the
property. According to the acquisition and sale agreement, we used 714,285
shares of common stock valued at $0.28 per share, or $200,000. We assumed two
notes payable totaling $547,000 that encumbers the Arapahoe County property and
assumed notes payable to individuals totaling $662,000. We paid cash in the
amount of $125,000 and the seller of the Arapahoe County property agreed to
assume a note payable from us with a principal balance totaling $249,323.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

# REAL ESTATE
OPPORTUNITIES, INC.
NOTES TO
CONDENSED, CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

| | The terms of the agreement included a participation agreement valued at
$666,000. Terms of the participation agreement state that we agree to pay the
seller of the Arapahoe County property approximately 24% of the first $2,750,000
sale after deducting selling costs plus 20%. All future payments to the seller
will be recorded as additions to the costs basis of the property. Exceptions
include real estate taxes and assessments, interest on the assumed $547,000
encumbrances, interest, points and costs associated with refinancing, and points
and costs associated with construction and development loans.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)      Frederick development, lot 6
| | -------------------------------------

| | During
the second quarter ended July 31, 2001 we sold lot 6 to an outside organization
at a price of $49,000. We recorded a gain on the sale in the amount of $1,519.
Selling costs associated with the transaction includes a sale commission and
title insurance in the amounts of $1,470 and $293, respectively.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)      Frederick development, lot 9
| | -------------------------------------

| | We
sold lot 9 to an individual at the price of $220,000. We were in the completion
stage of building a house on the lot. Our cost at the time of the sale totaled
$240,406 and we recorded a loss on the sale in the amount of $20,406. In spite
of the loss on the sale, the property attracted other developers and investors
to the platted ground. The results culminated in the sales of the Frederick and
Firestone development lands.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e)      Littleton, Colorado property
| | -------------------------------------

| | We
acquired a house located on Roxborough Drive in Littleton, Colorado at an
acquisition price in the amount of $247,000. We sold the property to an
individual at a price of $245,663 and recognized a loss on the sale in the
amount of $1,337.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

## Note 3:
Related party transactions

| | During the six months ended July 31, 2001:
| | ------------------------------------------

| | (a) We loaned an affiliate $500 to be repaid during the third quarter of 2001
without interest.
| | -----------------------------------------------------------------------------------------------

| | (b) We loaned a director $30,037. The Company received payment of $25,537 during
the period ended July 31, 2001.
| | ----------------------------------------------------------------------------------------------------------------

| | (c)
We received from Platinum Financial Fund, LLC, proceeds totaling $144,290 from
the sale of its participation interest. The Company recorded a gain from the
sale of the stock for the six months period July 31, 2001 in the amount of
$94,228. The balance of the participation interest at July 31, 2001 is $-0-.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) We sold retail space to an affiliate, Color-Spec Technologies, Inc. for
$54,745. Net cash received from the affiliate totaled $47,052 during the first
quarter of our fiscal year.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e) We rented office space from an affiliate. Total cost for the period ended
July 31, 2001 was $4,500.
| | -------------------------------------------------------------------------------------------------------

---

# REAL ESTATE
OPPORTUNITIES, INC.
NOTES TO
CONDENSED, CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

| | (f) We paid an affiliate for accounting. Total cost for the sic months period
ended July 31, 2001 was $900.
| | -----------------------------------------------------------------------------------------------------------

| | (g) We paid an affiliate homeowner association fees related to the development
of its in the Town of Frederick. Total cost for the period ended July 31, 2001
was $375.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (h)
Advanced Gas & Oil Corp. (AGO), Asset Realization, Inc. (ARI), Cape Aloe
Corp. (CAC), Color-Spec Technologies, Inc. (CST), Platinum Financial Fund, LLC
(PFF), and Krupka-Brophy Profit Sharing Plan (KBP) are affiliates of our
Company. For the three months period ended July 31, 2001, the Company borrowed
$155,300 from PFF and repaid PFF $57,000 of the amount we borrowed, leaving a
balance in the amount of $98,300 to be repaid to PFF during our third quarter of
this fiscal year.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i)
We also borrowed $151,000 from affiliates and have repaid $44,666 of the amount
borrowed. The table below lists the notes and terms.
| | ----------------------------------------------------------------------------------------------------------------------------------------

`As of July 31,
  Short term notes payable - related parties:                   2001
  ------------------------------------------                -------------
Note payable to Color-Spec Technologies, Inc. for $75,000, unsecured
  bearing interest at 16% maturing on September 1, 2001 ............... $  30,334
Note payable to Color-Spec Technologies, Inc. for $24,000, unsecured
  bearing interest at 15% maturing on October 1, 2001 .................    24,000
Note payable to Color-Spec Technologies, Inc. for $52,000, unsecured
  bearing interest at 15% maturing on October 1, 2001 .................    52,000
                                                                         --------
                                                                        $ 106,334
                                                                         ========
  Long-term, unsecured notes payable to related parties:
  -----------------------------------------------------
Refinanced, note payable to Color-Spec Technologies, Inc. for $75,000,
  unsecured, bearing interest at 14% maturing on May 1, 2002 .......... $  29,076
Refinanced, note payable to Color-Spec, Technologies, Inc., unsecured
  bearing interest at 13.5% maturing on May 1, 2002 ...................    46,723
                                                                         --------
                                                                           75,799
                                                                         ========
  Combined total of unsecured notes payable to relatcd parties ........ $ 182,133
                                                                         ========`

| | (j)
During the six months period ended July 31, 2001, we refinanced or paid debt
principal and interest to affiliates as follows:
| | ---------------------------------------------------------------------------------------------------------------------------------

---

# REAL ESTATE
OPPORTUNITIES, INC.
NOTES TO
CONDENSED, CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

`Commercial rental property - related parties                    Principal    Interest
  --------------------------------------------                    ---------    --------
Paid note payable to Asset Realization, Inc., collateralized
  by a first deed of trust, due on June 15, 2001 ............    $  12,519     $   334
Paid note payable to Color-Spec Technologies, Inc.,
  collateralized by a first deed of trust, at 13% due on
  June 15, 2001 .............................................       20,000         534

Firestone development property - related parties, continued
-----------------------------------------------------------
  Paid note payable to Krupka-Brophy Profit Sharing Plan,
    collateralized by a first deed of trust, at 13.5% due on
    October 26, 2001 ........................................       38,799       1,980
Refinanced $121,730 of $415,206 note payable to Krupka-Brophy
  Profit Sharing Plan, collateralized by a first deed of
  trust, at 9% due on February 3, 2002 ......................      415,206       9,416
Frederick devc1opment property - related parties
------------------------------------------------
Paid note payable to Krupka-Brophy Profit Sharing Plan,
  collateralized by a first deed of trust, at 6% due on
  December 15, 2001 .........................................       27,639         341
Paid note payable to Krupka-Brophy Profit Sharing Plan,
  collateralized by a first deed of trust, at 8,5% due on
  June 1, 2001 ..............................................      270,107       5,679
Paid note payable to Krupka-Brophy Profit Sharing Plan,
  collateralized by a first deed of trust, at 8.5% due on
  June 1, 2001 ..............................................       22,387         250
                                                                 ---------    --------
                                                                 $ 806,657    $ 18,534
                                                                 =========    ========`

| | (k)  Long-term secured notes payable to related parties.
| | --------------------------------------------------------

---

# REAL ESTATE
OPPORTUNITIES, INC.
NOTES TO
CONDENSED, CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

`Elbert County property notes
  ----------------------------
Refinanced $32,408 of $62,409 note payable to Advanced Gas
  & Oil Corp for $62,409 bearing interest at 14% with one
  payment of principal and interest due on June 13, 2002 ........  $  61,211
Note payable to Advanced Gas & Oil Corp.,
  bearing interest at 14% with one payment of principal
  and interest due on December 1, 2002 ..........................     12,000
Note payable to Advanced Gas & Oil Corp.,
  bearing interest at 14% with one payment of principal
  and interest due on December 1, 2002 ..........................     26,000
Note payable to Asset Realization, Inc.,
  for $11,000 bearing interest at 14% with one payment
  of principal and interest due on December 1, 2002 .............      5,196
Note payable to Cape Aloe Corp.,
  for $6,000 bearing interest at 14% with one payment
  of principal and interest due on December 1, 2002 .............      3,514
Note payable to Krupka-Brophy Profit Sharing Plan,
  bearing interest at 14% with one payment
  of principal and interest due on December 1, 2002 .............     12,000
Note payable to Krupka-Brophy Profit Sharing Plan,
  bearing interest at 14% with one payment
  of principal and interest due on December 1, 2002 .............     22,000
                                                                   ---------
                                                                   $ 141,921
                                                                   =========
  Arapahoe County property notes - related parties
  ------------------------------------------------
Refinanced note payable to Krupka-Brophy Profit Sharing Plan,
  bearing interest at 10% with quarterly
  payments of $10,000 starting October 1, 2001 and
  maturing on August 1, 2002 ....................................  $  89,836
Assumed note payable to Krupka-Brophy Profit Sharing Plan,
  bearing interest at 1O% with quarterly
  payments of $11,000 starting October 1, 2001 and
  maturing on August 1, 2002 ....................................    218,498

Note payable to Platinum Financial Fund, LLC,
  bearing interest at 1O% with quarterly payments of $1,000
  beginning October 1, 2001 and maturing on August 1, 2002 ......     16,307
Note payable to Platinum Financial Fund, LLC,
  bearing interest at 10% with quarterly payments of $1,000
  beginning October 1, 2001 and maturing on December 1, 2002 ....     10,000
                                                                   ---------
                                                                   $ 334,641
                                                                   =========`

## Note 4: Short
and long-term debt

| | During the six months ended July 31, 2001:
| | ------------------------------------------

| | (a) The Company refinanced or paid individuals outstanding balances on notes
payable with interest.
| | ---------------------------------------------------------------------------------------------------

`Frederick development - other                                              Principal      Interest
  -----------------------------                                              ---------      --------
Paid note payable to Nancy Miller, collateralized by deed of trust,
  at 13.5% interest due June 1, 2001 .....................................   $ 102,813      $   6,477
Paid note payable to Robert Singer, collateralized by deed of trust,
  at 15% interest due October 4, 2001 ....................................     150,138          8,494
Paid note payable to Robert Singer, collateralized by deed of trust,
  at 15% interest due June 1, 2001 .......................................     121,604          3,979
Refinanced $203,000 of $207,000 note payable to Jack Ford Profit
  Shaing Plan, collateralized by a deed of trust, at 14% interest
  due March 1, 2002 ......................................................     207,000          8,677

  Firestone development - other
  -----------------------------
Refinanced $28,153 of $33,266 note payable to an individual,
  bearing interest at 13.5% due February 3, 2002 .........................      33,266          2,450
Refinanced $45,237 of $48,805 note payable to an individual
  bearing interest at 13.5% due February 3, 2002 .........................      48,805          3,280

  Commercial rental property - other
  ----------------------------------
Paid note payable to Edward Herber, collateralized by a deed of trust
  bearing interest at 13% due June 15, 2001 ..............................      15,000          1,132
Paid note payable to Shirley Herber, collateralized by a deed of trust
  bearing interest at 13% due June 15, 2001 ..............................      15,000          1,132`

---

# REAL ESTATE
OPPORTUNITIES, INC.
NOTES TO
CONDENSED, CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

# REAL ESTATE OPPORTUNITIES,
INC.

`Commercial rental properly - other, continued                               Principal      Interest
  ---------------------------------------------                               ---------      --------
Paid note payable to Robert Singer, collateralized by a deed of trust,
  bearing interest at 13%, due June 15, 2001 ..............................  $  38,085       $  1,641
Paid note payable to Thomas Vesey, collateralized by a deed of trust,
  bearing interest at 13%, due June 15, 2001 ..............................     39,396          1,080
                                                                             ---------        -------
                                                                             $ 771,107       $ 38,342
                                                                             =========        =======

  Elbert and Riverside County notes
  ---------------------------------
Note payable to an individual for $475,000 bearing interest at
  15% secured by the Elbert and Reiverside County properties,
  with quarterly payments of interest only beginning
  September 1, 2001 maturing July 12, 2002 ...............................   $ 475,000

Refinanced note payable to an individual for $203,000 bearing interest at 14%
  secured by the Elbert and Riverside County properties, with
  monthly payments of $4,000 maturing June 13, 2002 ......................     200,402
                                                                             ---------
                                                                             $ 675,402
                                                                             =========
  Arapahoe County notes
  ---------------------
Note payable to an individual for the amount of $92,000
  assumed by the Company bears interest at 6% with
  quai terly payments in the amount of $3,500 maturing
  August 1, 2002 .........................................................  $   92,000
Note payable to an individual for the amount of $71,026
  assamed by the Company bears interest at 10% with
  quarterly payments in the amount of $3,000 maturing
  August 1, 2002 .........................................................      71,027
Note payable to an individual for the amount of $163,000
  assumed by the Company bears interest at 6% with
  quarterly payments in the amount of $4,000 maturing
  August 1, 2002 .........................................................     163,000
Note payable to an individual for the amount of $101,168
  assumed by the Company bears interest at 1O% with
  quarterly payments in the amount of $5,000 maturing
  August 1, 2002 .........................................................     101,168
Note payable First American State Bank in the amount of
  $465,831 assumed by the Company with monthly
  payments of interest only at Prime plus 1.5% starting
  July 11, 2001 and maturing December 11, 2001 ...........................     465,831
Assumed note payable Germain Investment Company in the
  original amount of $75,000 due on or before
  October 4, 2001 bearing interest at 18% with monthly
  interest payments in the amount of $1,175 and the
  balance maturing October 4, 2001 .......................................      80,000
                                                                            ----------
                                                                            $  973,026
                                                                            ==========`

---

# REAL ESTATE
OPPORTUNITIES, INC.
NOTES TO
CONDENSED, CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

| | Aggregate maturities required on debt at January 31, 2001 as follows:
| | ---------------------------------------------------------------------

`2002 .........................................................   $   707,514
2003 .........................................................     1,599,609
2004 .........................................................         --
                                                                   ---------
                                                                 $ 2,307,123
                                                                   =========`

## Note 5:
Shareholders Equity

| | We
recorded stock-based compensation in the amount of $102,320 during the three
months period ended July 31, 2001. The stock-based compensation represents
639,500 shares of common stock that was issued for Company promotion by a public
relations organization and legal services. The stock was valued at $.16 per
share at the time the compensation was paid.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Other
transactions as discussed above include the issuance of 1,409,285 shares of
common stock for real estate acquisitions and 173,000 shares issued to a former
employee from the exercise of stock options discussed in Results of
Operationsbelow.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

## Note 6: Income
taxes

| | The
Company records its income taxes in accordance with Statement of Financial
Accounting Standard No. 109, Accounting for Income Taxes. The
Company incurred net operating income during the six months ended July 31, 2001
and net operating losses for the six months ended July 31, 2000, resulting in
income tax payable in the amount of $125,182 and a deferred tax asset, which was
fully allowed for, which resulted in the net benefit and expense result in $0
income taxes, respectively.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

# REAL ESTATE
OPPORTUNITIES, INC.
PART 1.
FINANCIAL INFORMATION
ITEM 2. MANAGEMENTS
DISCUSSION AND ANALYSIS

## Forward-Looking
Statements.

The following discussion
contains forward-looking statements regarding our Company, its business,
prospects and results of operations that are subject to certain risks and
uncertainties posed by many factors and events that could cause our actual
business, prospects and results of operations to differ materially from those
that may be anticipated by such forward-looking statements. Factors that may
affect such forward-looking statements include, without limitation: our ability
to successfully develop new products for new markets, the impact of competition
on our revenues, changes in law or regulatory requirements that adversely affect
or preclude clients from using our products for certain applications, delays our
introduction of new products or services, and our failure to keep pace with
emerging technologies.

When used in this
discussion, word such as believes, anticipates,
expects, intends and similar expressions are intended to
identify forward-looking statements, but are not the exclusive means of
identifying forward-looking statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date of
this report. Our Company undertakes no obligation to revise any forward-looking
statements in order to reflect events or circumstances that may subsequently
arise. Readers are urged to carefully review and consider the various
disclosures made by us in this report and other reports filed with the
Securities and Exchange Commission that attempt to advise interested parties of
the risks and factors that may affect our business.

## Overview

Industry overview

We believe that the current
economic readjustment in America has affected the Colorado real estate market by
trimming the consumer demand for high price investments/purchases such as
houses. This translates into a Colorado real estate market that is in a flat to
softening state. Additionally, we see indications in Colorado that
sellers are taking less than the list price for the first time in a number of
months. We believe that Colorado real estate well become increasingly difficult
to sell if there is a significant downturn in the U.S. economy.

Plan of Operation

Our plan of operation has
always been to avoid long-term management of properties by essentially acting as
a wholesaler of properties between individual sellers of underdeveloped land and
the developers. From time to time, however, we would take on long-term
management with the appropriate partner. Our policy was to avoid, as much as
possible, hiring management personnel for the maintenance or development of our
properties. Instead, we would plan to either immediately sell the individual
property or to find partners from the real estate industry, who would have years
of experience and who would bring their own contacts and resources to a project
development.

We plan to keep this plan
of operation but also feel that we must broaden our base. In addition to looking
for opportunities in the real estate market in Colorado, we also plan to pursue
the acquisition of intellectual properties, with a specific focus in electronic
applications relating to medical monitoring devices. We have no firm
acquisitions at this point, but will be looking for intellectual properties,
which may be acquired directly from inventors with a view toward commercializing
the technology. We plan to use our expertise in fund raising to develop
commercial applications for properties, which we may select.

---

Some of these intellectual
properties will be long-term developments. Some properties may lend themselves
to the kind of wholesale transactions between individual inventors and long-term
developers, which we now do in the real estate area. We will look at each
potential project, whether short-term or long-term as an opportunity to maximize
our share value for our shareholders. We have no firm acquisitions at this
point. We are talking with individuals in the U.S. and overseas regarding
several possibilities, none of which may ever be successful. However, it is
important to note that the focus of our company has now been broadened beyond
real estate and real estate-related activities. We anticipate making an initial
acquisition of intellectual properties before the end of our fiscal year.

We want to note that our
Chief Executive Officer will take the majority of his compensation as a share of
our net profit. He is paid a base salary of only $6,000 per year. The remainder
of his compensation is 25% of our net profits before tax. We believe that this
creates a substantial incentive for our Chief Executive Officer to be dedicated
to maximizing our earnings and thereby benefiting our shareholders at the same
time. We also believe that this arrangement gives us the best opportunity to
achieve the most favorable conditions in each transaction.

## Results of
Operations

We have begun generating
operating revenues during this fiscal year and plan to continue to do so as we
broaden our operational base. We were profitable for the year ended January 31,
2001. We generated a profit for the first fiscal quarter of 2001. However, we
had slight loss for our second fiscal quarter. Our net income for the six months
ended July 31, 2001, was $121,108, compared to a loss of $113,228 for the six
months ended July 31, 2000. We had a net loss for the three months ended July
31, 2001 of $17,686, compared to a loss of $67,629 for the three months ended
July 31, 2000. Our net income per share, on a fully diluted basis, was $.016 per
share for the six months ended July 31, 2001, compared to no income per share
for the six months ended July 31, 2000. Our net income per share, on a fully
diluted basis, was a loss $.002 per share for the three months ended July 31,
2001, compared to a loss of $.011 per share for the six months ended July 31,
2000.

We had total revenues of
$1,483,112 for the six months ended July 31, 2001, which compares to revenues of
$1,021 for the six months ended July 31, 2000. For the three months ended July
31, 2001 we had total revenues of $911,336 compared to $804 for the three months
period ended July 31, 2000. Total cost of sales, which consisted of cost of real
estate, sakes commissions, and closing costs, were $1,083,790, for the six
months ended July 31, 2001, compared to $-0- for the six months ended July 31,
2000. Total cost of sales were $775,717 for the three months ended July 31,
2001, compared to $-0- for the three months ended July 31, 2000. Total operating
expenses, which consisted of general and administrative expenses, were $252,683,
for the six months ended July 31, 2001, compared to $80,165 for the six months
ended July 31, 2000. Total operating expenses were $153,955 for the three months
ended July 31, 2001, compared to $50,258 for the three months ended July 31,
2000. The major components of general and administrative expenses are legal,
accounting, commissions, wages, rent and other expenses.

During the fiscal quarter
ended July 31, 2001, we sold our rental real estate and development properties
in the towns of Frederick and Firestone. The sale transactions were actually a
part of a much larger purchase transaction. In this purchase transaction, we
acquired the deed to a property in Arapahoe County, Colorado for a purchase
price of $2,084,000. We paid a part of this purchase price in the form of our
Firestone, Colorado property. We also took the Arapahoe County property subject
to encumbrances of approximately $1,290,000. We gave $125,000 in cash and issued
714,285 shares of our common stock. Finally, we gave the seller and its assigns
the right to receive, on a sliding scale, approximately 24% of our gain in the
ultimate sale of the Arapahoe County property. The effect of this transaction
has been to leave us with a deed to a platted subdivision of approximately 152
sites of which we will receive approximately 76% of the gain on the ultimate
sale. This was a complicated real estate transaction, which our accountants have
advised us must be shown, in part, as an exchange, rather than a sale and
purchase, of real estate. As a result, we reduced our potential gain by $158,900
out of a potential $215,678.

In addition, when we sold
our Frederick, Colorado property, we reduced our potential gain by $12,310 out
of a potential $97,906. We were also advised that this transaction must be
shown, in part, as an exchange, rather than a sale and purchase, of real estate.

---

The net effect of the
accounting treatment of these real estate sales was to gives us a slight loss
for the fiscal quarter. However, we anticipate increased revenues from the
continued development of our real properties in the next fiscal quarter. We hope
to be profitable in the next fiscal quarter. Nevertheless, we will broaden our
scope to include the acquisition and develop of intellectual properties.

Liquidity and Capital
Resources

Our net cash increased to
$8,710 as of July 31, 2001, compared to $170 as of July 31, 2000.

Our net cash received from
financing activities was $178,918 for the six months ended July 31, 2001,
compared to having received $237,549 for the six months ended July 31, 2000.
Cash from financing activities totaled $131,343, came as loans from related
parties for the six months ended July 31, 2001. Portions of the advances were
repaid to these parties. Eventually, all of these advances must be repaid. We
expect to repay the advances from the sale of our investment real estate
properties, or from refinancing using our investment properties to secure the
notes.

Other cash received from
financing activities came from the exercise of 173,000 shares of common stock
options by a former director. Total cash received from the exercise of the
options was $47,575.

We have an account
receivable of $5,000 from a related party and prepaid expenses of $26,611 for
the current period. The prepaid expenses consist mainly of interest points paid
to an individual and will be amortized over the life of the loan.

The Company recorded
stock-based compensation in the amount of $102,320 during the six months period
ending July 31, 2001. The stock-based compensation represents 639,500 shares of
common stock that was issued for Company promotion by a public relations
organization and legal services. The stock was valued at $.26 per share at the
time the compensation was paid.

Our financial condition is
good but the real estate market, particularly in Colorado, is showing signs of
distress. We plan to use our present financial conditions to broaden our
operational base. We continue to operate with minimal overhead. We cannot
guarantee that we will be able to maintain our current situation or to become
profitable again. Our plan is to build our company in any manner which will be
successful.

## Subsequent
events

On August 14, 2001, we entered
into a sale agreement with a Denver homebuilder to sell our Arapahoe County
property for $3,190,000, plus a potential $22,000 bonus per lot to be paid if
the final plat of the property exceeds 145 lots. The sale is scheduled to close
in our first quarter of 2002. We had originally acquired the property on July 7,
2001 for an acquisition price of $2,084,000.

On August 29, 2001 we
obtained financing from a lender using our Elbert County property as security.
Net proceeds from the financing totaled $670,000 which will be used for the
extinguishment of debt.

# PART II -
OTHER INFORMATION

Items 1 Through 5 - No
response required.

Item 6 Exhibits and reports
on Form 8-K.

---

# REAL ESTATE
OPPORTUNITIES, INC.
SIGNATURES

The financial information furnished
herein has not been audited by an independent accountant; however, in the
opinion of management, all adjustments (only consisting of normal recurring
accruals) necessary for a fair presentation of the results of operations for the
six months ended July 31, 2001 have been included.

Pursuant to the
requirements of the Securities and Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.

Real Estate Opportunities,
Inc.             
              
          Date: 9/13/01
By: /s/ F. Jeffrey Krupka (signed)
Chief Financial Officer

---